Seoul City Resolves 90% of 'Commercial Building Lease Disputes' in First Half of Year... Rent Most Common Cause of Disputes

85 Cases Submitted to Dispute Mediation Committee, 35 of 39 Mediation Cases Resolved
Dispute Mediation Committee Operated by 30 Experts Including Lawyers and Appraisers

[Asia Economy Reporter Lim Cheol-young] It has been revealed that Seoul City resolved disputes in 9 out of 10 cases initiated for mediation at the ‘Commercial Lease Dispute Mediation Committee’ in the first half of this year. The most common cause of disputes was rent adjustment.

According to Seoul City, a total of 85 cases were submitted to the dispute mediation committee in the first half of the year. The types of disputes were led by rent adjustment (28 cases), followed by contract termination (27 cases), repair costs (20 cases), contract renewal (5 cases), and key money (3 cases). Among the applicants for mediation, 81 were tenants (95%) and 4 were landlords (5%).

Seoul City held mediation committee meetings for 39 of the 85 cases received in the first half, and reached agreements between landlords and tenants in 35 cases (89.7%). The remaining 25 cases are still in mediation, with 21 cases dismissed due to refusal of participation by respondents, and 4 cases resulting in non-establishment.

Furthermore, over the past two and a half years since Seoul City began dispute mediation, 457 cases have been submitted to the mediation committee. Among the 254 cases where mediation was initiated, 218 cases (85.8%) reached an agreement. The disputes received were mostly rent adjustment (125 cases, 27%), repair costs (92 cases, 20%), and contract termination (91 cases, 20%).

The ‘Commercial Building Lease Dispute Mediation Committee,’ which resolves lease disputes through agreements between landlords and tenants, is composed of a group of 30 experts including lawyers, appraisers, architects, licensed real estate agents, and professors. The committee assists landlords and tenants in resolving conflicts related to commercial leases?such as rent adjustment, lease period, key money, contract renewal and termination, and store restoration?through dialogue and compromise.

In particular, agreements reached through the mediation committee have legal binding power that allows for enforcement applications, ensuring definite resolution. Additionally, the committee supports the creation of a healthy lease market by presenting the ‘Seoul-type Fair Rent,’ calculated using actual data from the past three years, including surveys on lease conditions in major commercial districts in Seoul, transaction case comparisons, and appraisals of rent and key money, to both landlords and tenants.

Meanwhile, alongside commercial lease dispute mediation, Seoul City has been operating the ‘Seoul Commercial Lease Consultation Center’ since 2002, which provides information on key money, contract renewal, rent adjustment, and offers legal consultations related to commercial leases.

In the first half of this year, the Seoul Commercial Lease Consultation Center handled a total of 7,912 consultations, averaging 66 consultations per day. The main consultation topics were rent adjustment (1,654 cases), contract renewal (1,305 cases), and contract termination or invalidity (1,239 cases).

Han Young-hee, Seoul City’s Director of Labor, Fairness, and Coexistence Policy, stated, “Due to the prolonged COVID-19 pandemic and resulting sales declines, the burdens and difficulties faced by tenant merchants are increasing. Seoul City will focus on not only mediating disputes between landlords and tenants but also fostering a healthy lease market where both parties can coexist.”

This content was produced with the assistance of AI translation services.